1 00:00:00,800 --> 00:00:04,360 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us 2 00:00:04,360 --> 00:00:07,560 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 3 00:00:07,600 --> 00:00:10,600 Speaker 1: iHeart Radio app, and the Bloomberg Business app. We're listening 4 00:00:10,600 --> 00:00:14,760 Speaker 1: on demand wherever you get your podcast. The nation's capitals 5 00:00:14,760 --> 00:00:17,360 Speaker 1: about as crowded as it has been since the last 6 00:00:17,400 --> 00:00:21,080 Speaker 1: time the IMF and pro bank game to down for locals, 7 00:00:21,120 --> 00:00:23,520 Speaker 1: and some people actually do live here. It's an endless 8 00:00:23,560 --> 00:00:26,599 Speaker 1: parade of motorcades and street closures for the world, hopefully 9 00:00:26,640 --> 00:00:30,479 Speaker 1: some solutions to the economic challenges facing so many nations, 10 00:00:30,920 --> 00:00:33,199 Speaker 1: and the Spring meetings begin with a warning, the IMF 11 00:00:33,240 --> 00:00:36,760 Speaker 1: cutting its global growth projections, warning of high uncertainty and 12 00:00:36,880 --> 00:00:40,120 Speaker 1: risks as stress from the banking sector adds to pressure 13 00:00:40,200 --> 00:00:43,400 Speaker 1: from all the interest rate hikes, tighter monetary policy. Not 14 00:00:43,440 --> 00:00:46,760 Speaker 1: to mention Russia's invasion of Ukraine. This is all familiar 15 00:00:46,800 --> 00:00:49,640 Speaker 1: ground for Treasury Secretary Janet Yellen, who spoke to reporters 16 00:00:49,640 --> 00:00:51,879 Speaker 1: this morning in Washington. For for a year now, the 17 00:00:51,960 --> 00:00:56,080 Speaker 1: world is contended with the nagative consequences of Russia's of 18 00:00:56,200 --> 00:01:01,040 Speaker 1: legal war against Ukraine. Many countries are still recovering from 19 00:01:01,080 --> 00:01:05,759 Speaker 1: the pandemic shock and in some countries, including the United States, 20 00:01:06,200 --> 00:01:10,000 Speaker 1: there have been recent pressures on our banking systems. I've 21 00:01:10,000 --> 00:01:14,280 Speaker 1: been in close communication with my counterparts over the past 22 00:01:14,400 --> 00:01:18,360 Speaker 1: few weeks on these developments, and I look forward to 23 00:01:18,400 --> 00:01:21,880 Speaker 1: continuing that dialogue this week. Kind of Yellen speaking just 24 00:01:21,959 --> 00:01:24,360 Speaker 1: in the last hour or so in Washington, and that's 25 00:01:24,400 --> 00:01:28,040 Speaker 1: where we begin with Maurice Obstveld, former chief economists at 26 00:01:28,040 --> 00:01:32,560 Speaker 1: the IMF, now Professor of Economics at the University of California, Berkeley. Professor, 27 00:01:32,600 --> 00:01:34,960 Speaker 1: it's great to have you. Welcome back to Bloomberg. How 28 00:01:35,040 --> 00:01:37,640 Speaker 1: concerned are you about this forecast as we look out 29 00:01:37,680 --> 00:01:40,880 Speaker 1: five years, knowing that central banks, including the FED, are 30 00:01:40,959 --> 00:01:45,040 Speaker 1: likely to keep hiking rates. I think it is worrisome. 31 00:01:45,319 --> 00:01:50,600 Speaker 1: The IMF marginally reduced their global growth forecast, but the 32 00:01:50,680 --> 00:01:56,200 Speaker 1: warnings about risks that are out there are extremely significant. Yeah, 33 00:01:56,240 --> 00:02:01,440 Speaker 1: they estimate one in four chants of global recession global 34 00:02:01,480 --> 00:02:05,760 Speaker 1: growth below two percent, So that's something that should worry 35 00:02:05,800 --> 00:02:10,080 Speaker 1: everyone well. And these are risks that we may not 36 00:02:10,200 --> 00:02:14,520 Speaker 1: be seeing ease anytime soon. I realize monetary policy is 37 00:02:14,560 --> 00:02:18,680 Speaker 1: one thing, but the impact of Russia's invasion of Ukraine 38 00:02:18,720 --> 00:02:22,600 Speaker 1: and some of the other uncertainties out there could last 39 00:02:22,680 --> 00:02:26,760 Speaker 1: some time though. Yeah, I think the immediate impact of 40 00:02:26,760 --> 00:02:30,760 Speaker 1: the invasion has dissipated, but there is still the risk 41 00:02:31,000 --> 00:02:35,720 Speaker 1: of an escalation of the conflict going forward. There are 42 00:02:35,880 --> 00:02:42,320 Speaker 1: financial risks. The immediate concerns over the spillovers from Silton 43 00:02:42,440 --> 00:02:47,519 Speaker 1: Valley Bank have receded, but we can't be confident that 44 00:02:47,800 --> 00:02:50,359 Speaker 1: this will not come back. You know, the blood is 45 00:02:50,400 --> 00:02:55,920 Speaker 1: in the water and sharks are definitely circling out there. Finally, 46 00:02:55,960 --> 00:03:01,120 Speaker 1: there's the persistence of inflation, which the now things will 47 00:03:01,160 --> 00:03:04,359 Speaker 1: be greater than they thought in January. So let's pick 48 00:03:04,400 --> 00:03:05,960 Speaker 1: through these a little bit, and we may as well 49 00:03:05,960 --> 00:03:09,520 Speaker 1: start where you just ended with inflation. How is that 50 00:03:09,600 --> 00:03:12,040 Speaker 1: the case when we're starting to hear even from Janet 51 00:03:12,080 --> 00:03:15,280 Speaker 1: Yellen today and I can I can play her words 52 00:03:15,400 --> 00:03:17,639 Speaker 1: for you, suggesting that, you know what, we might well 53 00:03:17,680 --> 00:03:19,520 Speaker 1: be over the worst of this, we're actually starting to 54 00:03:19,520 --> 00:03:24,480 Speaker 1: see inflation easing. How does that rationalize itself with what 55 00:03:24,480 --> 00:03:31,880 Speaker 1: we're hearing from the IMF. Well, the relatively favor favorable 56 00:03:33,720 --> 00:03:39,120 Speaker 1: headline growth forecast is a two edged weapon here, because 57 00:03:39,360 --> 00:03:42,200 Speaker 1: you know, on the one hand, it's great that recession 58 00:03:42,240 --> 00:03:45,320 Speaker 1: may not be imminent But on the other hand, the 59 00:03:45,720 --> 00:03:53,960 Speaker 1: continuing strength of consumption of labor markets, the continuing ease 60 00:03:54,000 --> 00:03:58,960 Speaker 1: of financial conditions, which the FUNDS Global Financial Stability Report 61 00:03:59,440 --> 00:04:05,280 Speaker 1: points to all our factors that will keep inflation from 62 00:04:05,280 --> 00:04:09,040 Speaker 1: falling sharply Further. I mean, we've certainly had a benefit 63 00:04:09,120 --> 00:04:13,640 Speaker 1: from the easing of supply chain pressures, from some easing 64 00:04:13,640 --> 00:04:19,680 Speaker 1: of energy and food prices, but core inflation in services 65 00:04:20,120 --> 00:04:24,760 Speaker 1: remains high, and getting that down to be consistent with 66 00:04:25,400 --> 00:04:29,440 Speaker 1: two percent inflation targets is going to be hard work. 67 00:04:29,800 --> 00:04:33,560 Speaker 1: Without a hardware landing than the Fund is now forecasting. 68 00:04:34,240 --> 00:04:37,840 Speaker 1: You add the wildcard of a reopening China, and all 69 00:04:37,920 --> 00:04:41,080 Speaker 1: bets are off. Here's what Janet Yellen said about the 70 00:04:41,120 --> 00:04:45,440 Speaker 1: inflationary component earlier. Today, prices of commodities like food and energy, 71 00:04:45,480 --> 00:04:51,080 Speaker 1: of stabilized supply chain pressures continue to ease, and global 72 00:04:51,160 --> 00:04:54,719 Speaker 1: growth projections remain higher than they were in the fall. 73 00:04:55,600 --> 00:04:58,880 Speaker 1: This progress is due in part to the steps we've taken. 74 00:04:59,600 --> 00:05:05,360 Speaker 1: Those include macroeconomic policies within our own borders and joint 75 00:05:05,360 --> 00:05:09,279 Speaker 1: actions like the Black Sea Green Initiative sort of helped 76 00:05:09,360 --> 00:05:14,000 Speaker 1: lower food costs. So is her optimism founded in facts? 77 00:05:14,080 --> 00:05:19,880 Speaker 1: Maurice I think it's an optimistic reading of where we're going. 78 00:05:20,279 --> 00:05:24,640 Speaker 1: The scenario of rapidly falling inflation is certainly possible. That 79 00:05:24,720 --> 00:05:28,279 Speaker 1: seems to be what the markets like to to cling to, 80 00:05:29,120 --> 00:05:33,680 Speaker 1: but I think in reality there could be some some 81 00:05:33,720 --> 00:05:39,719 Speaker 1: more severe challenges than m Secretary Allen is Uh is recognizing. 82 00:05:39,800 --> 00:05:42,599 Speaker 1: And again the the you know, the strength of labor markets. 83 00:05:42,640 --> 00:05:45,279 Speaker 1: I mean, look at look at where unemployment rates are, 84 00:05:46,720 --> 00:05:49,600 Speaker 1: not just in the US, but you know, go to Australia, 85 00:05:49,960 --> 00:05:53,120 Speaker 1: the the the unemployment rate there is at a fifty 86 00:05:53,160 --> 00:05:56,240 Speaker 1: year or low of three point five percent. So it's 87 00:05:56,279 --> 00:06:01,040 Speaker 1: hard to see how that is consistent with returning quickly 88 00:06:01,040 --> 00:06:04,560 Speaker 1: to two percent inflation. Sure, there was a bulge in 89 00:06:04,560 --> 00:06:09,000 Speaker 1: inflation in the US. It has come down, but there's 90 00:06:09,040 --> 00:06:12,680 Speaker 1: a stubborn core that remains, and if central banks want 91 00:06:12,720 --> 00:06:15,719 Speaker 1: to complete the work, they will have to keep interest 92 00:06:15,839 --> 00:06:20,000 Speaker 1: rates a bit higher and for longer, and that will 93 00:06:20,000 --> 00:06:25,159 Speaker 1: inevitably have some negative effect on growth going forward, maybe 94 00:06:25,279 --> 00:06:28,520 Speaker 1: not to the level of creating recession, but certainly to 95 00:06:28,600 --> 00:06:32,280 Speaker 1: the level of keeping growth beyond trend for some time 96 00:06:32,680 --> 00:06:35,680 Speaker 1: when we get back other risks, but when we get 97 00:06:35,720 --> 00:06:37,640 Speaker 1: back to the risk of war and the impact of 98 00:06:37,720 --> 00:06:42,880 Speaker 1: Russia's invasion in Ukraine, knowing the way it exacerbated supply 99 00:06:43,000 --> 00:06:47,440 Speaker 1: chain problems for food and so many other raw materials. 100 00:06:49,040 --> 00:06:51,960 Speaker 1: That's not over professor, and I wonder how does the 101 00:06:52,000 --> 00:06:56,000 Speaker 1: IMF gauge something like that in its forecast, realizing the 102 00:06:56,080 --> 00:07:01,040 Speaker 1: uncertainty that surrounds just about every decision Vladimir Putin makes. Well, 103 00:07:01,080 --> 00:07:03,920 Speaker 1: you know, Russia has of course threatened to back out 104 00:07:03,920 --> 00:07:11,880 Speaker 1: of the grain export deal, OPEC has has just decided 105 00:07:11,960 --> 00:07:16,120 Speaker 1: to restrict supply further to try to raise the global 106 00:07:16,120 --> 00:07:20,560 Speaker 1: oil price. These are all wild cards. You know, It's 107 00:07:20,560 --> 00:07:25,200 Speaker 1: important to realize what an IMF forecast is. It doesn't 108 00:07:25,240 --> 00:07:30,000 Speaker 1: necessarily take into account all eventualities. It's a median forecast. 109 00:07:30,080 --> 00:07:33,360 Speaker 1: It's a it's a projection of what they think is 110 00:07:33,720 --> 00:07:37,440 Speaker 1: the most likely outcome. But they always cove at that 111 00:07:37,640 --> 00:07:42,200 Speaker 1: with downside or upside scenarios, which, in their if you 112 00:07:42,360 --> 00:07:47,400 Speaker 1: have lower probability but could definitely occur. And what's worrisome 113 00:07:47,440 --> 00:07:52,880 Speaker 1: about their downside scenarios is that a they're pretty grim 114 00:07:52,960 --> 00:07:57,800 Speaker 1: and b they're not in the fund's estimation low probability events. 115 00:07:58,320 --> 00:08:01,080 Speaker 1: As I said, you know, twenty five percent chance of 116 00:08:01,120 --> 00:08:08,840 Speaker 1: global recession, fifteen percent chance of a risk off event 117 00:08:08,920 --> 00:08:14,840 Speaker 1: in financial markets, which could destabilize those markets and also 118 00:08:15,400 --> 00:08:18,800 Speaker 1: lead to lower growth. So there's nothing to be complacent 119 00:08:18,880 --> 00:08:25,440 Speaker 1: about in this forecast. Yeah, I mean Secretary Yellen rightly 120 00:08:25,520 --> 00:08:29,760 Speaker 1: highlights the positive side of what has happened, and there's 121 00:08:29,840 --> 00:08:33,120 Speaker 1: much that's positive compared to a year ago. But there 122 00:08:33,120 --> 00:08:38,160 Speaker 1: are challenges ahead. You're the former chief economist for the IMF. 123 00:08:38,200 --> 00:08:40,640 Speaker 1: You know what these meetings are all about. What should 124 00:08:40,640 --> 00:08:45,880 Speaker 1: people here in the US expect to come from them? Well, 125 00:08:46,960 --> 00:08:54,320 Speaker 1: aside from the IMFs invaluable forecasts, there is also the 126 00:08:54,360 --> 00:08:59,520 Speaker 1: meeting of the G twenty finance ministers and central bankers, 127 00:09:00,200 --> 00:09:05,080 Speaker 1: And here there are a number of collective challenges that 128 00:09:05,200 --> 00:09:10,160 Speaker 1: face the global community. Climate is one of them, health 129 00:09:10,280 --> 00:09:14,839 Speaker 1: is one of them. The next pandemic is certainly on 130 00:09:14,880 --> 00:09:22,559 Speaker 1: the horizon somewhere, and very important is progress on the 131 00:09:24,360 --> 00:09:31,440 Speaker 1: restructuring architecture for developing country debts, particularly lower and lower 132 00:09:31,440 --> 00:09:35,360 Speaker 1: middle income countries, some of which are under intense pressure 133 00:09:35,400 --> 00:09:40,920 Speaker 1: now as interest rates rise. There's a common framework that 134 00:09:41,000 --> 00:09:45,839 Speaker 1: the G twenty agreed to, but it's been slow in implementation. 135 00:09:46,720 --> 00:09:50,000 Speaker 1: It's not very comprehensive. In terms of country coverage or 136 00:09:50,320 --> 00:09:54,600 Speaker 1: bringing in private creditors, and it's been consistently falling a 137 00:09:54,679 --> 00:10:00,240 Speaker 1: foul of China's unwillingness to restructure its extensive debts to 138 00:10:01,440 --> 00:10:06,400 Speaker 1: poorer countries where it is the biggest official lender. Do 139 00:10:06,400 --> 00:10:09,880 Speaker 1: you expect more than another interest rate hike as the 140 00:10:09,920 --> 00:10:13,040 Speaker 1: market is predicting from the Fed? Most seemed to say 141 00:10:13,600 --> 00:10:16,720 Speaker 1: twenty five basis points in May and then they hold 142 00:10:16,760 --> 00:10:18,600 Speaker 1: for the rest of the year. Does that sound like 143 00:10:18,640 --> 00:10:20,719 Speaker 1: reality if there's a chance for a recession in the 144 00:10:21,040 --> 00:10:24,560 Speaker 1: second half, I think we'll have to see what the 145 00:10:24,600 --> 00:10:27,840 Speaker 1: inflation numbers look like and how economic activity in the 146 00:10:27,960 --> 00:10:35,960 Speaker 1: US responds. I think a slowly slowing labor market is 147 00:10:36,000 --> 00:10:41,319 Speaker 1: what the FED is trying to achieve, and we may 148 00:10:41,360 --> 00:10:44,360 Speaker 1: have seen some evidence of that in the last jobs 149 00:10:44,360 --> 00:10:47,480 Speaker 1: report from the US. But remember that level of jobs 150 00:10:47,520 --> 00:10:50,880 Speaker 1: creation is not what we would expect for slowing economy. 151 00:10:50,960 --> 00:10:55,520 Speaker 1: That is what we would expect under normal growth conditions. 152 00:10:55,520 --> 00:10:58,280 Speaker 1: In fact, it's a little bit stronger stronger than that. 153 00:10:58,760 --> 00:11:01,600 Speaker 1: So the FED is not in a place where they 154 00:11:01,640 --> 00:11:05,200 Speaker 1: would be willing to cut and I think they'd need 155 00:11:05,240 --> 00:11:08,079 Speaker 1: to see a much stronger evidence of a labor market 156 00:11:08,160 --> 00:11:10,880 Speaker 1: slowdown before they'd be willing to do that. I don't 157 00:11:10,920 --> 00:11:12,760 Speaker 1: know if that's going to be coming this year or not. 158 00:11:13,200 --> 00:11:15,959 Speaker 1: I hope the markets are listening to you, Professor. It's 159 00:11:15,960 --> 00:11:18,480 Speaker 1: great to spend some time with you. Maurice Hobstfield's the 160 00:11:18,559 --> 00:11:21,760 Speaker 1: former chief economist of the IMF, now professor of economics 161 00:11:21,760 --> 00:11:25,360 Speaker 1: at the University of California, Berkeley. You're listening to The 162 00:11:25,400 --> 00:11:29,520 Speaker 1: Bloomberg Sound on podcast. Catch the program live weekdays at 163 00:11:29,559 --> 00:11:33,079 Speaker 1: one Eastern on Bloomberg Radio, the tune in app, Bloomberg 164 00:11:33,160 --> 00:11:35,959 Speaker 1: dot Com, and the Bloomberg Business App. You can also 165 00:11:36,000 --> 00:11:39,560 Speaker 1: listen live on Amazon Alexa from our flagship New York station. 166 00:11:39,880 --> 00:11:45,359 Speaker 1: Just say Alexa play Bloomberg eleven thirty. So it's onto Chicago. 167 00:11:46,120 --> 00:11:50,240 Speaker 1: The DNC, the Democratic National Convention, indeed, will be in 168 00:11:50,280 --> 00:11:53,520 Speaker 1: the Windy City, and you better believe the RNC is 169 00:11:53,559 --> 00:11:55,880 Speaker 1: already talking about it. Wherese They're going to Milwaukee right. 170 00:11:56,120 --> 00:12:00,720 Speaker 1: Rona McDaniel, who of course chairs the Republican National Committee 171 00:12:00,800 --> 00:12:02,480 Speaker 1: out with a statement, quote, we look forward to the 172 00:12:02,600 --> 00:12:05,720 Speaker 1: DNC's convention, where their radical agenda will be on full 173 00:12:05,760 --> 00:12:08,800 Speaker 1: display for the world to see. She writes, Voters will 174 00:12:08,840 --> 00:12:12,160 Speaker 1: soundly reject whichever out of touch liberal the Democrats nominate 175 00:12:12,160 --> 00:12:16,160 Speaker 1: in Chicago. Of course, Joe Biden hasn't announced. She didn't 176 00:12:16,160 --> 00:12:19,040 Speaker 1: write that. I said that, and instead elect our Republican 177 00:12:19,080 --> 00:12:22,200 Speaker 1: nominee is the next president of the United States. Let's 178 00:12:22,200 --> 00:12:24,680 Speaker 1: reassemble the panel. Rick Davis and Genie Schanzano, we talked 179 00:12:24,679 --> 00:12:27,240 Speaker 1: about this when we knew there was a choice. Of course, 180 00:12:27,360 --> 00:12:30,160 Speaker 1: it could have been Atlanta, it could have been New York. 181 00:12:30,640 --> 00:12:35,600 Speaker 1: But it's Chicago, Genie Chanzano, the right choice, I think 182 00:12:35,679 --> 00:12:37,439 Speaker 1: so and Joe. I thought you were going to come 183 00:12:37,480 --> 00:12:40,360 Speaker 1: in with a Chicago song, but I can't. I don't 184 00:12:40,400 --> 00:12:43,400 Speaker 1: know what Chicago song, So you'll have to We'll take 185 00:12:43,440 --> 00:12:46,319 Speaker 1: care of that. Don't worry, please, you always do. I'm 186 00:12:46,320 --> 00:12:49,319 Speaker 1: thinking the Bean. I'm thinking deepnish. It's gonna be great 187 00:12:49,360 --> 00:12:52,960 Speaker 1: in Chicago. It's all about the Midwest for both parties 188 00:12:53,000 --> 00:12:55,640 Speaker 1: and the Bean. I love the Bean. I love Chicago. 189 00:12:55,679 --> 00:12:58,240 Speaker 1: I do think it's a really smart choice. As much 190 00:12:58,280 --> 00:13:00,280 Speaker 1: as I love my own city of New York City, 191 00:13:00,360 --> 00:13:02,080 Speaker 1: I think this is a smart choice. It is going 192 00:13:02,160 --> 00:13:05,079 Speaker 1: to be all about the Midwest. Chicago has done this 193 00:13:05,480 --> 00:13:08,719 Speaker 1: eleven times already, we're going to forget about nineteen sixty eight. 194 00:13:08,760 --> 00:13:11,319 Speaker 1: That's right. You've got not only the taint of nineteen 195 00:13:11,360 --> 00:13:13,280 Speaker 1: sixty eight and a lot of bad memories Genie. But 196 00:13:13,320 --> 00:13:17,240 Speaker 1: I thought Georgia was the future of the Democratic Party. Well, 197 00:13:17,240 --> 00:13:20,040 Speaker 1: you know, everything's going through the Midwest. That's how he 198 00:13:20,160 --> 00:13:22,360 Speaker 1: won in twenty twenty. They want to repeat that in 199 00:13:22,400 --> 00:13:26,360 Speaker 1: twenty four. Plus. We have a very very friendly city 200 00:13:26,360 --> 00:13:28,840 Speaker 1: in Chicago, maybe a bit friendlier than we have in 201 00:13:28,840 --> 00:13:31,520 Speaker 1: the state of Georgia in terms of the mayor and 202 00:13:31,600 --> 00:13:34,400 Speaker 1: the governor of Illinois. So I think the push was 203 00:13:34,440 --> 00:13:37,000 Speaker 1: out there for Chicago, and it is going to go 204 00:13:37,080 --> 00:13:40,920 Speaker 1: head to head with the Republicans rather in the Midwest. Plus, 205 00:13:41,040 --> 00:13:43,840 Speaker 1: Joe Matthew, it's happening over my birthday weekend. I couldn't 206 00:13:43,840 --> 00:13:46,080 Speaker 1: be more excited or weekend. Well, I hope, I see it. 207 00:13:46,160 --> 00:13:48,480 Speaker 1: There're gon We're gonna have to have a cake for 208 00:13:48,600 --> 00:13:51,400 Speaker 1: Genie Rick though, you know what all the reporting when 209 00:13:51,440 --> 00:13:53,720 Speaker 1: we especially when we come up to convention time, it's 210 00:13:53,720 --> 00:13:55,760 Speaker 1: going to be this split screen thing with images of 211 00:13:55,840 --> 00:13:59,440 Speaker 1: nineteen sixty eight and putting that against the madness of today. 212 00:13:59,559 --> 00:14:02,080 Speaker 1: Was that the right choice? When Atlanta seemed to have 213 00:14:02,120 --> 00:14:04,439 Speaker 1: so much promise, at least from what I hear from Democrats, 214 00:14:04,480 --> 00:14:07,280 Speaker 1: that's the future. It's a horrible choice. I hate to 215 00:14:07,320 --> 00:14:11,079 Speaker 1: disagree with, Genie, but you know, first of all, Chicago's 216 00:14:11,120 --> 00:14:13,959 Speaker 1: their reputation couldn't be worse. You know, businesses are leaving 217 00:14:13,960 --> 00:14:16,480 Speaker 1: in droves, they have a high crime rate. They just 218 00:14:16,559 --> 00:14:20,800 Speaker 1: elected a mayor who's representative of the you know, defund 219 00:14:20,840 --> 00:14:23,560 Speaker 1: the police movement. I mean, it's just a disaster. And 220 00:14:23,600 --> 00:14:25,920 Speaker 1: they're not gonna lose Illinois. They're going to spend one 221 00:14:26,000 --> 00:14:28,880 Speaker 1: hundred million dollars in a state that they know they're 222 00:14:28,920 --> 00:14:31,760 Speaker 1: gonna win anyway. And so I look at this as 223 00:14:31,800 --> 00:14:35,560 Speaker 1: a political practitioner of old and say, oh, would that 224 00:14:35,680 --> 00:14:38,800 Speaker 1: hundred million be better spent in a really important, critical 225 00:14:38,880 --> 00:14:42,200 Speaker 1: swing state like Georgia, which was the only reason that 226 00:14:42,280 --> 00:14:44,920 Speaker 1: he is actually President of the United States today. I mean, like, 227 00:14:45,160 --> 00:14:48,680 Speaker 1: I don't get it. And obviously the political team was 228 00:14:48,680 --> 00:14:51,200 Speaker 1: out the lunch when they made this decision. How did 229 00:14:51,200 --> 00:14:54,160 Speaker 1: Democrats frame this then, knowing that's going to be the reaction, Genie, 230 00:14:54,200 --> 00:14:56,760 Speaker 1: how do they pull this off and blunt the nineteen 231 00:14:56,840 --> 00:15:00,880 Speaker 1: sixty eight impacts? Well, you know, they at eleven finds 232 00:15:00,880 --> 00:15:03,000 Speaker 1: out there. So one time out of eleven is not 233 00:15:03,080 --> 00:15:06,800 Speaker 1: so bad. You know, we're gonna make a you know, 234 00:15:07,000 --> 00:15:10,640 Speaker 1: a bite fan of Chicago as we go forward. You know, listen, 235 00:15:10,640 --> 00:15:13,080 Speaker 1: I think they really do feel that the Midwest is 236 00:15:13,120 --> 00:15:15,640 Speaker 1: where it is all at. And you know, he did 237 00:15:15,680 --> 00:15:19,240 Speaker 1: win Georgia rightly so, and they feel prepared that they 238 00:15:19,240 --> 00:15:21,880 Speaker 1: could do it again. But they do think that they 239 00:15:21,960 --> 00:15:24,800 Speaker 1: have to make a play for the Midwest, and he 240 00:15:24,880 --> 00:15:28,560 Speaker 1: has to win Pennsylvania, he has to win Wisconsin, Michigan. 241 00:15:28,760 --> 00:15:31,440 Speaker 1: I agree, he will win Illinois. I think he'll win 242 00:15:31,520 --> 00:15:33,920 Speaker 1: all of them if he's facing Donald Trump. But I 243 00:15:34,000 --> 00:15:36,640 Speaker 1: do think this is a smart decision. I think Atlanta 244 00:15:36,680 --> 00:15:38,880 Speaker 1: would have done a good decision as well. But I 245 00:15:38,920 --> 00:15:40,480 Speaker 1: do think it makes sense. It's going to come a 246 00:15:40,520 --> 00:15:42,880 Speaker 1: month after the Republicans have their showing out in the 247 00:15:42,880 --> 00:15:46,480 Speaker 1: Midwest and Chicago. I would just say one thing. The 248 00:15:46,800 --> 00:15:49,760 Speaker 1: newly elected mayor out there is not a defund the 249 00:15:49,800 --> 00:15:52,960 Speaker 1: police guy. He's not quite as sort of lefty as 250 00:15:53,480 --> 00:15:55,400 Speaker 1: some people have suggested. I think we have to see 251 00:15:55,480 --> 00:15:57,080 Speaker 1: him in action. Well, you know what is going to 252 00:15:57,200 --> 00:15:59,520 Speaker 1: be going to New York is the next field hearing 253 00:16:00,120 --> 00:16:03,640 Speaker 1: by the Republican led Judiciary Committee, the House Judiciary Committee, 254 00:16:03,680 --> 00:16:07,560 Speaker 1: Jim Jordan is headed for Lower Manhattan Monday morning to 255 00:16:07,600 --> 00:16:12,600 Speaker 1: hold a field hearing on crime on violence in New 256 00:16:12,680 --> 00:16:16,160 Speaker 1: York City. A pretty remarkable move here, and there's talk 257 00:16:16,240 --> 00:16:19,280 Speaker 1: that Eric Adams, the Mayor, might even show up himself 258 00:16:19,320 --> 00:16:22,320 Speaker 1: to refute this. We know that Jerry Nadler is planning 259 00:16:22,320 --> 00:16:24,320 Speaker 1: to be there, he's the panel's ranking member. But there's 260 00:16:24,360 --> 00:16:26,920 Speaker 1: going to be a more concerted response here. What's the 261 00:16:27,040 --> 00:16:30,840 Speaker 1: Republican Committee doing in this case? Rick? Why travel to 262 00:16:30,880 --> 00:16:34,440 Speaker 1: New York for this conversation? Yeah, that's just grandstanding. You know, 263 00:16:34,600 --> 00:16:37,800 Speaker 1: in the age of investigations that we're now in, everybody's 264 00:16:37,800 --> 00:16:41,000 Speaker 1: got to have one. And I have no doubt that 265 00:16:41,000 --> 00:16:44,440 Speaker 1: this is a reaction to to, you know, President Trump's 266 00:16:44,440 --> 00:16:49,120 Speaker 1: indictment by the Manhattan DA. They've already expressed an interest 267 00:16:49,160 --> 00:16:51,280 Speaker 1: in finding out if there are any federal funds that 268 00:16:51,320 --> 00:16:54,920 Speaker 1: were used in the effort to you know, indict Donald Trump, 269 00:16:55,480 --> 00:16:57,960 Speaker 1: and so, you know, it's just a it's just another 270 00:16:58,040 --> 00:17:00,480 Speaker 1: grandstanding move. While we have things that need to be 271 00:17:00,520 --> 00:17:03,160 Speaker 1: done in Washington. You have a debt ceiling and needs 272 00:17:03,200 --> 00:17:05,920 Speaker 1: to be increased. We have budgets that need to be tackled. 273 00:17:06,680 --> 00:17:09,960 Speaker 1: We have field trips like this that really literally will 274 00:17:09,960 --> 00:17:13,000 Speaker 1: amount to nothing other than a couple of headlines. And 275 00:17:13,040 --> 00:17:15,840 Speaker 1: my suspicion is those headlines will be mixed even if 276 00:17:15,880 --> 00:17:18,879 Speaker 1: they have a good day on the Republican side. The 277 00:17:19,000 --> 00:17:23,440 Speaker 1: Judiciary Committee tweeted Genie the hearing advisory note am Monday morning, 278 00:17:23,440 --> 00:17:27,600 Speaker 1: April seventeen, field hearing on victims of violent crime in Manhattan. 279 00:17:27,600 --> 00:17:29,600 Speaker 1: Of course they want Alvin Bragg to come down. And 280 00:17:29,640 --> 00:17:33,399 Speaker 1: Alvin Bragg replied on Twitter and spun this story around. 281 00:17:33,440 --> 00:17:35,600 Speaker 1: He says, don't be fooled. The house GOP is coming 282 00:17:35,600 --> 00:17:39,320 Speaker 1: to the safest big city in America for a political stunt. 283 00:17:39,359 --> 00:17:42,719 Speaker 1: He goes on to write, murders or down fourteen percent 284 00:17:42,800 --> 00:17:46,760 Speaker 1: in Manhattan, shootings down seventeen percent, burglaries down twenty one percent, 285 00:17:46,840 --> 00:17:49,600 Speaker 1: robberies down eight percent. It would be more dangerous to 286 00:17:49,600 --> 00:17:53,119 Speaker 1: hold this hearing, he says. In Columbus, Ohio. Is he right? 287 00:17:54,760 --> 00:17:57,040 Speaker 1: You know? I think it's showing that the Democrats are 288 00:17:57,119 --> 00:17:59,080 Speaker 1: not going to do what they did when the field 289 00:17:59,080 --> 00:18:02,160 Speaker 1: trip took them out to the issue of immigration out 290 00:18:02,200 --> 00:18:04,760 Speaker 1: in the West. They are going to meet they didn't 291 00:18:04,800 --> 00:18:06,920 Speaker 1: show up. And you know, I think in this case, 292 00:18:06,960 --> 00:18:10,119 Speaker 1: as you mentioned, it's Jerry Nabler's home city, he is 293 00:18:10,200 --> 00:18:11,840 Speaker 1: they are going to be there in full force, and 294 00:18:12,160 --> 00:18:14,439 Speaker 1: you know, I think this is a risky strategy for 295 00:18:14,520 --> 00:18:17,679 Speaker 1: Jim Jordan. He feels competent, he's as smart, he's an 296 00:18:17,680 --> 00:18:19,399 Speaker 1: able guy that he can go head to head with 297 00:18:19,520 --> 00:18:22,000 Speaker 1: people like may Or Adams and whoever else they invite 298 00:18:22,000 --> 00:18:25,359 Speaker 1: to testify. But it is a risky strategy because Democrats 299 00:18:25,359 --> 00:18:27,439 Speaker 1: are going to meet them and guess what they're going 300 00:18:27,480 --> 00:18:30,000 Speaker 1: to talk about. They're going to talk about the resistance, 301 00:18:30,359 --> 00:18:34,560 Speaker 1: about addressing the issue of guns, semi automatic guns. They're 302 00:18:34,560 --> 00:18:37,800 Speaker 1: going to raise what happened yesterday in Louisville. They're going 303 00:18:37,840 --> 00:18:40,560 Speaker 1: to raise the children shot in their schools, and they're 304 00:18:40,560 --> 00:18:43,439 Speaker 1: going to say, if you're so concerned about crime, and 305 00:18:43,520 --> 00:18:45,959 Speaker 1: we trust you are, why don't we take some common 306 00:18:46,000 --> 00:18:49,440 Speaker 1: sense steps on gun control, why don't you follow us there? 307 00:18:49,520 --> 00:18:51,920 Speaker 1: And so I do think this is a risky strategy 308 00:18:51,960 --> 00:18:53,800 Speaker 1: for Jim Jordan. It is going to be at the 309 00:18:53,880 --> 00:18:56,800 Speaker 1: Javits Center and everybody is going to be following. It's 310 00:18:56,800 --> 00:19:01,400 Speaker 1: going to be another busy day in Manhattan. God meantime, 311 00:19:01,440 --> 00:19:04,600 Speaker 1: as we spend time with Rick and Jeanie, we have 312 00:19:04,680 --> 00:19:07,359 Speaker 1: to acknowledge what happened yesterday in Tennessee. We were right 313 00:19:07,359 --> 00:19:09,200 Speaker 1: in the middle of balance of power when we learned 314 00:19:09,560 --> 00:19:12,160 Speaker 1: that Justin Jones, the state rep one of the three, 315 00:19:12,280 --> 00:19:15,840 Speaker 1: one of the Tennessee three, had been reinstated. As the 316 00:19:15,960 --> 00:19:20,119 Speaker 1: sound of him being sworn in and the reaction outdoors 317 00:19:20,119 --> 00:19:23,080 Speaker 1: when this took place, he spoke to those in the 318 00:19:23,119 --> 00:19:25,879 Speaker 1: house after, I want to welcome democracy back to the 319 00:19:25,920 --> 00:19:29,320 Speaker 1: People's House. That on last Thursday, members of this body 320 00:19:29,400 --> 00:19:31,840 Speaker 1: tried to crucify democracy. But today we stand as a 321 00:19:31,880 --> 00:19:34,560 Speaker 1: witness of a resurrection of a movement of a multiracial 322 00:19:34,560 --> 00:19:39,240 Speaker 1: democracy that no unjust decision will stand. Justin Jones speaking 323 00:19:39,320 --> 00:19:44,160 Speaker 1: after the city Council. In facts, the Nashville Metropolitan Council 324 00:19:44,600 --> 00:19:48,000 Speaker 1: voted to return him to the seat he was expelled 325 00:19:48,040 --> 00:19:52,760 Speaker 1: from literally hours earlier. It was only a couple of days, Rick, 326 00:19:52,840 --> 00:19:55,080 Speaker 1: This stuff moves pretty quick. They just made a political 327 00:19:55,119 --> 00:19:58,040 Speaker 1: celebrity out of at least one of the Justin's. Yeah, 328 00:19:58,200 --> 00:20:00,000 Speaker 1: I think the Republic has been doing a really good 329 00:20:00,119 --> 00:20:03,400 Speaker 1: job of elevating democrats these days. And uh, and they 330 00:20:03,400 --> 00:20:06,600 Speaker 1: certainly did that in the in the legislature there and 331 00:20:06,600 --> 00:20:09,000 Speaker 1: and my suspicions tomorrow the same will happen with the 332 00:20:09,000 --> 00:20:13,160 Speaker 1: other Justin who goes before his counsel to be reinstated, 333 00:20:13,480 --> 00:20:15,760 Speaker 1: and the two will be both by by the week end, 334 00:20:15,880 --> 00:20:20,359 Speaker 1: within one week standing on the state House floor once 335 00:20:20,359 --> 00:20:23,720 Speaker 1: again reinstated as members. Uh. And so all this will 336 00:20:23,760 --> 00:20:26,480 Speaker 1: have just in order to the benefit of the Democratic 337 00:20:26,520 --> 00:20:31,320 Speaker 1: Party of Tennessee. So I really scratch my head wondering, 338 00:20:31,400 --> 00:20:34,320 Speaker 1: you know what brilliant tactician you know in the House 339 00:20:34,400 --> 00:20:37,800 Speaker 1: rules uh, in Tennessee legislature decided this was such a 340 00:20:37,920 --> 00:20:42,520 Speaker 1: great idea to expel these these gentlemen. So uh, you 341 00:20:42,560 --> 00:20:46,040 Speaker 1: know another another example, you know where if you have 342 00:20:46,080 --> 00:20:48,880 Speaker 1: all the power, uh, sometimes you have to sit back 343 00:20:48,920 --> 00:20:50,919 Speaker 1: and say, well, we just don't want to use it today. 344 00:20:51,080 --> 00:20:54,280 Speaker 1: And in a in a one party town, Um, you 345 00:20:54,320 --> 00:20:56,960 Speaker 1: know they've done it to themselves. So just a minute 346 00:20:57,000 --> 00:20:59,199 Speaker 1: left here, Genie, is this a story of overreach or 347 00:20:59,240 --> 00:21:02,960 Speaker 1: something worse? It's overreach And I'm going to go even further, 348 00:21:03,000 --> 00:21:06,200 Speaker 1: Joe Matthew, it is political malpractice. They should have known 349 00:21:06,280 --> 00:21:08,879 Speaker 1: that this is going to be what happens if they 350 00:21:08,960 --> 00:21:11,439 Speaker 1: remove these people, and this is exactly what happens. They 351 00:21:11,440 --> 00:21:14,639 Speaker 1: are celebrities. Now, well you expel the two black lawmakers 352 00:21:14,640 --> 00:21:16,920 Speaker 1: and keep the white woman. It does smack of racism, 353 00:21:16,960 --> 00:21:21,119 Speaker 1: doesn't it absolutely? And she said it herself, and you 354 00:21:21,119 --> 00:21:22,800 Speaker 1: know you didn't have to watch it too closely to 355 00:21:22,920 --> 00:21:26,200 Speaker 1: know that. And it's come back to haunt them. Always 356 00:21:26,280 --> 00:21:27,960 Speaker 1: learn something. When we talked to Rick and Jennie thinks 357 00:21:27,960 --> 00:21:29,800 Speaker 1: to both of you, guys, our signature panel here on 358 00:21:29,880 --> 00:21:34,640 Speaker 1: sound on Bloomberg Politics contributors for a reason you're listening 359 00:21:34,640 --> 00:21:38,400 Speaker 1: to the Bloomberg Sound On podcast. Catch us live weekdays 360 00:21:38,400 --> 00:21:41,160 Speaker 1: at one Eastern on Bloomberg dot com, the r Heart 361 00:21:41,240 --> 00:21:43,879 Speaker 1: Radio app, and the Bloomberg Business App. We're listening on 362 00:21:43,960 --> 00:21:47,560 Speaker 1: demand wherever you get your podcast. Thanks for being with 363 00:21:47,680 --> 00:21:50,000 Speaker 1: us on Bloomberg sound On. I'm Joe, Matthew and Washington. 364 00:21:50,080 --> 00:21:53,200 Speaker 1: As Kaylee Lynes joins the conversation, it's good to see 365 00:21:53,200 --> 00:21:57,000 Speaker 1: a Kayley. The story about Pentagon leaks is leading our 366 00:21:57,000 --> 00:22:01,520 Speaker 1: conversation today. We talked about what hundred pages or so 367 00:22:01,640 --> 00:22:04,679 Speaker 1: that ended up on discord, and we're learning more about them, 368 00:22:04,680 --> 00:22:08,240 Speaker 1: and there's one that is particularly meaningful, I think to 369 00:22:08,240 --> 00:22:10,679 Speaker 1: the Administration here because they actually came out today to 370 00:22:10,840 --> 00:22:13,920 Speaker 1: say it wasn't true, and that's news that Egypt planned 371 00:22:13,920 --> 00:22:16,920 Speaker 1: to produce forty thousand rockets for Russia, telling officials to 372 00:22:17,000 --> 00:22:19,840 Speaker 1: keep it secret to avoid problems with the West, that 373 00:22:19,920 --> 00:22:22,800 Speaker 1: according to the document that was leaked. Here's John Kirby 374 00:22:23,520 --> 00:22:26,000 Speaker 1: speaks for the National Security Council on Air Force one 375 00:22:26,040 --> 00:22:28,159 Speaker 1: today talking with reporters on their way to Ireland. What 376 00:22:28,200 --> 00:22:30,840 Speaker 1: I will tell you is we've seen no indication that 377 00:22:30,960 --> 00:22:36,119 Speaker 1: Egypt is providing legal weapon or capabilities to Russia. I 378 00:22:36,280 --> 00:22:38,400 Speaker 1: think it's going to take to track down where these 379 00:22:38,480 --> 00:22:42,480 Speaker 1: documents came from. Difficult to know, Steve. I mean, obviously 380 00:22:42,520 --> 00:22:44,800 Speaker 1: we're all working at this very very hard. We'd like 381 00:22:44,840 --> 00:22:47,119 Speaker 1: to get answers as quickly as we can so we 382 00:22:47,160 --> 00:22:49,880 Speaker 1: can find out that, you know, where this breach occurred. 383 00:22:50,320 --> 00:22:53,119 Speaker 1: So they still clearly don't know where these came from 384 00:22:53,200 --> 00:22:55,720 Speaker 1: or how many should be trusted well. And this is 385 00:22:55,760 --> 00:22:58,359 Speaker 1: the giant question mark hanging over all of this right 386 00:22:58,400 --> 00:23:01,200 Speaker 1: because if it was a bad actor, eventially an adversary 387 00:23:01,280 --> 00:23:04,200 Speaker 1: that leaked these documents, there's a question of the validity 388 00:23:04,240 --> 00:23:06,960 Speaker 1: of them, whether they have been altered in any way 389 00:23:07,080 --> 00:23:10,160 Speaker 1: or just completely fraudulent. And if some of them are true, 390 00:23:10,240 --> 00:23:12,560 Speaker 1: how do you then go through and divide what are 391 00:23:12,600 --> 00:23:16,919 Speaker 1: actually accurate presentations of what the US government and Defense 392 00:23:16,920 --> 00:23:19,639 Speaker 1: Department is doing and what are not potentially could be 393 00:23:19,720 --> 00:23:25,280 Speaker 1: used as propaganda or false information distribution. So this is 394 00:23:25,359 --> 00:23:27,639 Speaker 1: really a giant question, and it doesn't really seem like 395 00:23:27,640 --> 00:23:31,320 Speaker 1: we're getting any closer to answers, does it, Joe, Well, no, 396 00:23:31,640 --> 00:23:35,640 Speaker 1: and that was abundantly clear in the conversation with John 397 00:23:35,720 --> 00:23:38,120 Speaker 1: Kirby's something we wanted to talk to Mark Ginsberg about. 398 00:23:38,119 --> 00:23:41,600 Speaker 1: The former ambassador to Morocco joins US right now on 399 00:23:41,600 --> 00:23:44,239 Speaker 1: Bloomberg's sound on Ambassador, you ever heard of anything like this? 400 00:23:44,320 --> 00:23:46,800 Speaker 1: We can't tell not only where they came from, but 401 00:23:46,840 --> 00:23:51,320 Speaker 1: whether they're real. Well, this is an unmitigated disaster for 402 00:23:51,359 --> 00:23:57,000 Speaker 1: the US government. And it's not only a painful leak 403 00:23:57,440 --> 00:24:01,359 Speaker 1: that is undermining US credibility, but it's also placing at 404 00:24:01,440 --> 00:24:04,199 Speaker 1: risk the very military effort the United States has been 405 00:24:04,200 --> 00:24:10,199 Speaker 1: engaged and to support Ukraine. The documents regarding Ukraine reveal 406 00:24:10,320 --> 00:24:12,800 Speaker 1: that the Ukrainians are not only suffering from a lack 407 00:24:12,840 --> 00:24:16,160 Speaker 1: of ammunition, which of course many of US have known 408 00:24:16,560 --> 00:24:20,040 Speaker 1: but that their air defenses now could be exposed to 409 00:24:20,119 --> 00:24:23,399 Speaker 1: Russian Air Force attacks, which the Russian Air Force has 410 00:24:23,440 --> 00:24:25,680 Speaker 1: avoided doing ever since the first days of the war. 411 00:24:26,160 --> 00:24:29,199 Speaker 1: But more importantly, if I may make this point, the 412 00:24:29,280 --> 00:24:33,800 Speaker 1: United States government and the guise of President Obama personally 413 00:24:33,880 --> 00:24:39,119 Speaker 1: pledged after the leak of the Snowden documents, the Wikia documents, 414 00:24:39,480 --> 00:24:44,080 Speaker 1: that the United States would no longer spy on US allies, 415 00:24:44,440 --> 00:24:48,919 Speaker 1: would no longer spy. It was a public pledge that 416 00:24:49,040 --> 00:24:53,879 Speaker 1: the president made, and here is his former vice president's 417 00:24:54,280 --> 00:24:59,800 Speaker 1: presidential administration doing just that. So let's talk about how 418 00:25:00,000 --> 00:25:03,800 Speaker 1: as plays with our allies, especially as the president is 419 00:25:04,520 --> 00:25:07,600 Speaker 1: going on a trip abroad to the UK. I mean, 420 00:25:07,880 --> 00:25:12,480 Speaker 1: how difficult is it as a former ambassador in the 421 00:25:12,560 --> 00:25:15,800 Speaker 1: US government to make that presentation to our allies and say, hey, 422 00:25:15,800 --> 00:25:20,919 Speaker 1: we're still friends. Sorry for doing that. Well, let me 423 00:25:21,040 --> 00:25:25,320 Speaker 1: let me go across the world with you. The South 424 00:25:25,400 --> 00:25:29,120 Speaker 1: Korean government is furious, according to The New York Times, 425 00:25:29,680 --> 00:25:32,920 Speaker 1: that the US that these documents reveal that the US 426 00:25:33,040 --> 00:25:40,160 Speaker 1: government was spying on national security officials in the president's administration. 427 00:25:40,200 --> 00:25:46,120 Speaker 1: This is President Une's administration. This is as was quoted 428 00:25:46,160 --> 00:25:50,879 Speaker 1: by someone, This is a super scale security breach because 429 00:25:51,040 --> 00:25:55,000 Speaker 1: not only undermines the respect that the allies have for 430 00:25:55,080 --> 00:25:59,280 Speaker 1: each other. Look, Defense Defense Secretary Austin was just in 431 00:25:59,320 --> 00:26:04,000 Speaker 1: South Korea pledge and continued United States cooperation and support. 432 00:26:04,520 --> 00:26:08,520 Speaker 1: And now this has created a domestic political fure for 433 00:26:08,600 --> 00:26:12,879 Speaker 1: the South Korean government, opposition leaders claiming that the Biden 434 00:26:12,880 --> 00:26:16,960 Speaker 1: administration cannot be trusted. So does this feel like excuse 435 00:26:17,000 --> 00:26:20,240 Speaker 1: time with the administration suggesting that these documents may have 436 00:26:20,320 --> 00:26:23,040 Speaker 1: been doctored kind of gives them an out here on 437 00:26:23,520 --> 00:26:26,240 Speaker 1: spying on our allies or is that just the worst 438 00:26:26,320 --> 00:26:30,920 Speaker 1: kept secret? It sounds like that's what you're suggesting, ambassador. Look, 439 00:26:30,920 --> 00:26:34,720 Speaker 1: I'm very troubled over the fact that that a administration 440 00:26:34,800 --> 00:26:37,480 Speaker 1: that was composed of the very people in the Obama 441 00:26:37,520 --> 00:26:41,639 Speaker 1: administration who are now in charge are essentially violating a 442 00:26:41,720 --> 00:26:44,960 Speaker 1: very pledge that their own president made in his terms. 443 00:26:45,000 --> 00:26:48,000 Speaker 1: So that's point one point two. This is embarrassed this 444 00:26:48,080 --> 00:26:52,120 Speaker 1: administration's integrity. It's embarrassed for the fact that we see 445 00:26:52,359 --> 00:26:55,639 Speaker 1: we not only can't can't seem to keep a secret. 446 00:26:55,960 --> 00:26:58,240 Speaker 1: But let me give you another example. You know this 447 00:26:59,119 --> 00:27:05,119 Speaker 1: software that has been violently opposed for its ability to 448 00:27:05,960 --> 00:27:11,040 Speaker 1: intercept phone calls and make mobile phones operate manufactured by 449 00:27:11,080 --> 00:27:16,800 Speaker 1: the Israelis this Pegasus software? Yeah, the Biden administration, in 450 00:27:16,880 --> 00:27:19,879 Speaker 1: the guise of the President themselves, said that the United 451 00:27:19,920 --> 00:27:23,719 Speaker 1: States would not in any way, shape or form permit 452 00:27:23,840 --> 00:27:28,320 Speaker 1: that software to operate in the United States, much less 453 00:27:29,320 --> 00:27:32,960 Speaker 1: play sanctions on it, only for US to find out 454 00:27:33,080 --> 00:27:36,800 Speaker 1: just a few days ago that a secret company set 455 00:27:36,840 --> 00:27:43,120 Speaker 1: up at the United States contracted with NSO to retain 456 00:27:43,240 --> 00:27:48,840 Speaker 1: the Pegasus software for use in the United States. How 457 00:27:48,840 --> 00:27:52,520 Speaker 1: can the United States say that on the one hand, 458 00:27:52,880 --> 00:27:55,880 Speaker 1: we're we're going to sanction a company and then turn 459 00:27:55,920 --> 00:27:58,399 Speaker 1: around and say, oh, by the way, we're doing business 460 00:27:58,480 --> 00:28:02,160 Speaker 1: with it. I mean, it raises questions among our allies 461 00:28:02,200 --> 00:28:05,520 Speaker 1: about whether or not we are really being truthful about 462 00:28:05,560 --> 00:28:08,399 Speaker 1: these documents, that they may be false, or that this 463 00:28:08,480 --> 00:28:11,040 Speaker 1: is just a ruse. Well, but on the point of 464 00:28:11,640 --> 00:28:14,359 Speaker 1: whether or not they're real or false, how much cover, 465 00:28:14,800 --> 00:28:18,359 Speaker 1: if any, does that actually give the US government If 466 00:28:19,560 --> 00:28:24,639 Speaker 1: some portion, unknown portion of this is all made up, well, look, 467 00:28:24,760 --> 00:28:27,359 Speaker 1: in the end, this too will blow over this two 468 00:28:28,040 --> 00:28:31,879 Speaker 1: our alliances are far too important to let the security 469 00:28:31,920 --> 00:28:35,560 Speaker 1: breaches like this undermine the very integrity of the most 470 00:28:35,600 --> 00:28:39,680 Speaker 1: important allies that we have, Australia, South Korea, Israel, and 471 00:28:40,320 --> 00:28:44,200 Speaker 1: even and of course our allies in Europe. So your 472 00:28:44,280 --> 00:28:47,560 Speaker 1: question is valid, But none of us really know whether 473 00:28:47,600 --> 00:28:51,320 Speaker 1: these documents were doctored or nothing, and by whom. And 474 00:28:51,360 --> 00:28:54,600 Speaker 1: the fact that they had been leaked and not intercepted 475 00:28:54,640 --> 00:28:57,760 Speaker 1: for days because they were on social media before the 476 00:28:57,840 --> 00:29:01,200 Speaker 1: US government even realized, right, that says a lot more 477 00:29:01,280 --> 00:29:04,840 Speaker 1: about how much we're monitoring our own secrets. Well, ambassador, 478 00:29:04,840 --> 00:29:08,560 Speaker 1: not only do you have a long career in foreign 479 00:29:08,560 --> 00:29:11,760 Speaker 1: affairs and geopolitics, but you also co founded the Coalition 480 00:29:11,800 --> 00:29:14,840 Speaker 1: for a Safer Web, and that's partly why we wanted 481 00:29:14,880 --> 00:29:18,240 Speaker 1: to talk to you. Is this the tip of the iceberg? Essentially? 482 00:29:18,240 --> 00:29:21,320 Speaker 1: How many US state secrets live on the dark web 483 00:29:21,400 --> 00:29:27,000 Speaker 1: right now, there for sale and sale the highest bidder, 484 00:29:27,280 --> 00:29:31,760 Speaker 1: and much of it involves the privacy violations of American 485 00:29:31,760 --> 00:29:37,240 Speaker 1: officials where they live. They're so security numbers, bank accounts, 486 00:29:37,800 --> 00:29:39,720 Speaker 1: all things that you and I would never want to 487 00:29:39,760 --> 00:29:42,320 Speaker 1: see in the hands of criminals are in the dark web. 488 00:29:42,320 --> 00:29:45,760 Speaker 1: And we monitor not only the dark web, but we 489 00:29:45,800 --> 00:29:49,960 Speaker 1: monitor extremists who are operating in a dark web, and 490 00:29:50,520 --> 00:29:53,160 Speaker 1: as well as in what we call encrypted platforms such 491 00:29:53,160 --> 00:29:58,000 Speaker 1: as Telegram, signal, WhatsApp, because many of the extremist groups 492 00:29:58,800 --> 00:30:01,240 Speaker 1: you are using these encrypt the platforms in the dark 493 00:30:01,280 --> 00:30:06,000 Speaker 1: web to undertake criminal activities to fund their operations. Well, 494 00:30:06,040 --> 00:30:09,240 Speaker 1: in theory, shouldn't the Department of Defense, the US government 495 00:30:09,360 --> 00:30:11,840 Speaker 1: know about this and be trying to to plug the 496 00:30:11,920 --> 00:30:13,840 Speaker 1: holes in the Internet where they see them? I mean, 497 00:30:13,840 --> 00:30:17,320 Speaker 1: how do you combat this? Well, first of all, it's 498 00:30:17,320 --> 00:30:19,600 Speaker 1: a violation of US law for them to do that, 499 00:30:19,720 --> 00:30:23,640 Speaker 1: because they and they've been reprimanded by Congress as well 500 00:30:23,680 --> 00:30:27,400 Speaker 1: as by other organizations for even daring to think that 501 00:30:27,440 --> 00:30:31,840 Speaker 1: they could seek a backdoor to encrypted platforms, Which is 502 00:30:31,840 --> 00:30:35,640 Speaker 1: one of the reasons why you may recall that when 503 00:30:35,760 --> 00:30:39,840 Speaker 1: the when the San Bernardino attack occurred years ago, the 504 00:30:39,960 --> 00:30:43,480 Speaker 1: terrorist attack, and the US government sought a backdoor into 505 00:30:43,560 --> 00:30:47,480 Speaker 1: Apple's iPhone, they were not able to get it. The 506 00:30:47,560 --> 00:30:50,320 Speaker 1: Israelis actually of all countries, gave it to the United 507 00:30:50,320 --> 00:30:56,080 Speaker 1: States FBI. There's no magic bullet to uncover what is 508 00:30:56,120 --> 00:31:00,640 Speaker 1: going on within encrypted dark web platforms. We we the 509 00:31:01,120 --> 00:31:04,080 Speaker 1: Coalition for a Safer Web or about to launch a 510 00:31:04,080 --> 00:31:07,040 Speaker 1: new initiative which we can do because we're a private 511 00:31:07,160 --> 00:31:14,360 Speaker 1: entity to create avatars to penetrate these encrypted platforms. So 512 00:31:14,440 --> 00:31:17,440 Speaker 1: when you step back and look at this, ambassador, what 513 00:31:17,640 --> 00:31:20,160 Speaker 1: is your thought The Pentagon has a leak problem, or 514 00:31:20,200 --> 00:31:22,920 Speaker 1: the Pentagon is vulnerable to hacks, or is it somewhere 515 00:31:22,960 --> 00:31:26,000 Speaker 1: in the middle. I think it's somewhere in the middle. 516 00:31:30,280 --> 00:31:36,520 Speaker 1: They were clearly listening this happens. You still were this, ambassador. Yeah, sorry, 517 00:31:36,680 --> 00:31:40,400 Speaker 1: dropped out. I said, it's not just the Pentagon, it's 518 00:31:40,400 --> 00:31:43,320 Speaker 1: also the entire national security network of the US government. 519 00:31:43,840 --> 00:31:48,640 Speaker 1: I don't know, because these these secret documents were shared 520 00:31:49,280 --> 00:31:52,880 Speaker 1: across the entire national security network of the United States. 521 00:31:53,160 --> 00:31:56,920 Speaker 1: We're talking about the CIA, We're talking about the National 522 00:31:57,000 --> 00:31:59,880 Speaker 1: Security Council of the United States, We're talking about the 523 00:32:00,040 --> 00:32:03,840 Speaker 1: National Security Agency, all of the alphabet soup of encrypted 524 00:32:03,880 --> 00:32:08,800 Speaker 1: and non encrypted security agencies in the United States. So 525 00:32:08,920 --> 00:32:12,680 Speaker 1: I don't know why anyone is just singularly focused on 526 00:32:12,720 --> 00:32:15,360 Speaker 1: a Pentagon. There could have been there could have been 527 00:32:16,440 --> 00:32:20,600 Speaker 1: bad actors in any of these other agencies. Yeah, right, Well, 528 00:32:20,640 --> 00:32:23,800 Speaker 1: when you're talking about information for sale, I don't Kayley, 529 00:32:23,840 --> 00:32:26,560 Speaker 1: can you imagine are you on discord, ambassador, we talked 530 00:32:26,600 --> 00:32:30,000 Speaker 1: about this, this is this video gaming chat site where 531 00:32:30,000 --> 00:32:32,880 Speaker 1: this stuff is emerging. I mean, what does that tell 532 00:32:32,920 --> 00:32:36,000 Speaker 1: you about the source. I've been on Discord for years. 533 00:32:36,080 --> 00:32:40,719 Speaker 1: I love this Discord, Discord as a playground for gamers. Yeah, 534 00:32:40,800 --> 00:32:43,760 Speaker 1: and and people people who people have ever heard of it? 535 00:32:43,880 --> 00:32:47,160 Speaker 1: So when I give presentations about where the bad actors 536 00:32:47,200 --> 00:32:49,800 Speaker 1: are and I say Discord, they say, oh, you mean 537 00:32:49,920 --> 00:32:53,560 Speaker 1: like Discords, we have Discord among us. I said no, no, no, 538 00:32:53,920 --> 00:32:56,840 Speaker 1: that's the name of the platform. And I showed them 539 00:32:56,960 --> 00:33:00,680 Speaker 1: videos of gamers who are engaged not only in bad acting, 540 00:33:00,760 --> 00:33:04,000 Speaker 1: but an anti Semitic extremist activities. I mean, the list 541 00:33:04,040 --> 00:33:07,800 Speaker 1: goes on and on, and of course this just comes 542 00:33:07,840 --> 00:33:10,680 Speaker 1: back to the monitoring question of Discord and all of 543 00:33:10,680 --> 00:33:13,880 Speaker 1: these other social platforms, all of which are Internet based. 544 00:33:13,880 --> 00:33:16,840 Speaker 1: And we know how this goes the saying that what 545 00:33:16,960 --> 00:33:19,480 Speaker 1: happens on the Internet lives forever. I mean, once this 546 00:33:19,600 --> 00:33:24,240 Speaker 1: information is out there, how can the US government retract it, 547 00:33:24,640 --> 00:33:27,840 Speaker 1: bring it back? Or is this now just secrets that 548 00:33:27,880 --> 00:33:32,600 Speaker 1: will live forever. We spent a lot of time helping 549 00:33:32,600 --> 00:33:37,160 Speaker 1: the New Zealand government trying to take down the live 550 00:33:37,240 --> 00:33:41,640 Speaker 1: streaming of the christ Church massacre several years ago, and 551 00:33:41,720 --> 00:33:46,200 Speaker 1: to this day. No matter how much we've tried, several 552 00:33:46,200 --> 00:33:49,800 Speaker 1: of those videos still pop up because the way in 553 00:33:49,840 --> 00:33:54,360 Speaker 1: which bad actors act, they're able to not only encrypt 554 00:33:54,400 --> 00:33:59,480 Speaker 1: these videos, but digitally alter their footprints so that they 555 00:33:59,480 --> 00:34:04,600 Speaker 1: pop up on different language websites. It should come as 556 00:34:04,640 --> 00:34:08,720 Speaker 1: no surprise to the American public and your listeners that 557 00:34:08,880 --> 00:34:12,040 Speaker 1: the social media companies don't have any legal obligation to 558 00:34:12,120 --> 00:34:15,399 Speaker 1: monitor their sites, much less to take down in any 559 00:34:15,400 --> 00:34:17,520 Speaker 1: of the content that we consider it to be adverse. 560 00:34:17,840 --> 00:34:20,280 Speaker 1: They only have a moral obligation as long as section 561 00:34:20,320 --> 00:34:24,479 Speaker 1: two thirty of the Communications Decency Act protects them. That's 562 00:34:24,520 --> 00:34:27,040 Speaker 1: a whole other conversation to you. Then we've spent some 563 00:34:27,120 --> 00:34:29,520 Speaker 1: time on two thirty, Ambassador, you should just come in 564 00:34:29,520 --> 00:34:31,759 Speaker 1: and spend an hour with us. At some point, is 565 00:34:31,800 --> 00:34:37,280 Speaker 1: Discord the poster child or is it one of many? No, Actually, 566 00:34:37,640 --> 00:34:42,960 Speaker 1: the biggest problem that we have is from the mobile 567 00:34:43,000 --> 00:34:48,640 Speaker 1: app called Telegram, which is a major supermarket for secrets, 568 00:34:49,200 --> 00:34:54,200 Speaker 1: the purveyance of secrets and the marketing of extremist activities 569 00:34:54,680 --> 00:34:59,080 Speaker 1: the supermarket. This is wild. I want to take his class. 570 00:34:59,360 --> 00:35:02,279 Speaker 1: Whatever press sentation you've got, I am in the ambassador. 571 00:35:03,360 --> 00:35:06,600 Speaker 1: I'm honored to be even considered to be wanting to 572 00:35:06,640 --> 00:35:10,280 Speaker 1: be your professor. He's the former US Ambassador to Morocco, 573 00:35:10,440 --> 00:35:14,160 Speaker 1: a longtime US diplomat with a great career of experience. 574 00:35:14,160 --> 00:35:16,319 Speaker 1: He's speaking from here and also founder and president of 575 00:35:16,360 --> 00:35:19,520 Speaker 1: the Coalition of the Safer Web, the Honorable Mark Ginsburg, 576 00:35:19,600 --> 00:35:21,680 Speaker 1: Thank you, ambassador for the insights today. Come back and 577 00:35:21,719 --> 00:35:29,840 Speaker 1: see us here on Bloomberg. Remarkable conversation. Thanks for listening 578 00:35:29,880 --> 00:35:32,239 Speaker 1: to the Sound On podcast. Make sure to subscribe if 579 00:35:32,239 --> 00:35:35,080 Speaker 1: you haven't already, at Apple, Spotify, and anywhere else you 580 00:35:35,120 --> 00:35:37,839 Speaker 1: get your podcasts, and you can find us live every 581 00:35:37,840 --> 00:35:41,200 Speaker 1: weekday from Washington, DC at one pm Eastern Time at 582 00:35:41,200 --> 00:35:42,880 Speaker 1: Bloomberg dot com.